High Court stops ‘dubious’ timber company

The High Court in Mzuzu has granted an injunction to Timber Millers Cooperatives Union, an umbrella union of eight registered timber millers, stopping the operations of Sterling Timber International Limited from transacting any business in the 53,000 hectare Viphya plantation in Mzimba district until a judicial review is done, Nyasa Times has established.

The Timber Millers Cooperatives Union which consists of the following registered Saw Millers Cooperatives: Chamatete, Lusangazi, Chibwaka, Zikomo, Viphya, Luwawa and Kalungulu, sought the court’s intervention after the company started conducting its business in a covert way contrary to the expectations of the Union, which is the majority shareholder.

The Union is also not happy that around 300 of its members were allocated 62.5 million ordinary shares while three millers who are in the company’s top hierarchy allocated themselves 37.5 million shares.

Peter Mwanza: Director of Sterling Timber

Under civil cause number 50 of 2012, the Union as plaintiff and Paul Makolosi, Tawonga Mtegha, Wilfred Tsaka and Sterling Timber International Limited as defendants prayed to the court for an order of mandatory injunction to force the defendants to disclose, reveal or avail to the plaintiffs any documents or dealings that they have so far transacted.

“It is granted ordering the defendants, their servants, employees, agents or any other directors to refrain from transacting or carrying on any business or dealings for, on behalf or in the name of the plaintiffs and their umbrella union,” Judge Dingiswayo Madise said.

Madise then ordered the plaintiffs (Timber Millers Cooperatives Union) to file an inter-partes summons within seven days and that an inter-partes hearing should be held within 14 days at the Mzuzu District Registry before him.

The Court further ordered the Plaintiffs to pay MK500,000.00 for the injunction to take effect. The Union paid the money.

Madise also warned directors of Sterling Timber International Limited that they risk imprisonment, fines, confiscation of assets if they disobey the order and are found guilty of contempt of court.

Sterling Timber International Limited, which was registered on 9 February, 2012, has the following directors, the Minister of Agriculture, Professor Peter Mwanza, Hennox Mazengera, Alexander Makwata, Paul Makolosi, Tawonga Mtegha, Willfred Tsaka and Paul Feston Tsoka Banda according to a copy of the registration certificate, Nyasa Times obtained.

Paradoxically, it appears as if Mwanza, Mazengera and Makwata do not belong to any registered Timber Millers Association and it remains to be seen how these people bulldozed their way into the company, a development our sources said is odd and unorthodox.

“Having contributed so much morally, physically, spiritually and financially, members were surprised to learn that the Union, which gave birth to the formation of the Company was to own only 62.5 percent. But some Millers(Paul Makolosi, Tawonga Mtegha and Willfred Tsaka) who performed work on behalf of the Union gave themselves personal shares of 12.5 percent each.

“As if giving themselves 4 percent was not a shame, they remorselessly went ahead to give themselves positions of Directors in the company without bothering to make minimum consultations with the members of the union,” reads minutes of the mobile Saw Millers meeting held on May 6th, 2012 at Chenda Hotel in Mzuzu.

The company was formed so that it assists Union members to export timber after adding value.

“Members were greatly concerned with the spirit of hiding information from them. The directors of company were giving any type of excuses to prevent members from having access to all documents such as constitutions, articles of association and memorandum of association. Sadly members were neither consulted nor involved in coming up with the said documents,” the minutes reads.

Since its formation, the Company has been operating under secrecy, getting loans from banks, acquiring assets and employing staff without the knowledge of the Union, the minutes revealed.

“Spending has already started without minding to inform members where the financial resources came from. No consultations what so ever were made when incurring all expenses,” members lamented.